As a venture-to-early growth stage investor, I’m searching for existing mass-markets, which have yet to be disrupted or automated by the Internet.
Technology, via the Internet and appstores, is radically changing well-established industries and markets – particularly inefficient ones – and essentially I’m looking for new takes on traditional businesses.
Problem-solving with a vision
Second, I always carefully unpick a business model so that I am clear precisely what the problem is that it’s solving – and how the company will go about solving it (and therefore make money, by making customers happy.)
Third, the deals I recommend are invariably with teams I actively want to work with. VCs are often asked whether they back teams or ideas? The answer is always teams.
There are thousands of great ideas out there, but it’s the execution of an idea which matters, which is why, at Index, we focus our energy and resources on assembling the right team.
We look for visionaries; people who have spotted something everyone else hasn’t. And as we work so intensively with our portfolio companies, personal chemistry matters too.
A fast-growing company will invariably go through several iterations, which means the road ahead will be rocky at times. So you might as well partner with people with whom you want to spend a lot of time.